FILE PHOTO: Abercrombie & Fitch products are seen at their store at the Woodbury Common Premium Outlets in Central Valley, New York, U.S., February 15, 2022. REUTERS/Andrew Kelly
March 2, 2022
By Deborah Mary Sophia
(Reuters) -Clothes retailer Abercrombie & Fitch Co missed estimates for holiday-quarter sales and profit on Wednesday due to sector-wide product shortages and COVID-19 curbs, sending shares down about 11%.
Factory closures in Vietnam and shipping delays resulted in shortages during the peak Christmas and New Year shopping period, with the U.S. company struggling to obtain important seasonal items such as outerwear.
Abercrombie’s sales in the Asia Pacific region fell 21% in the quarter as renewed restrictions in some parts of the world due to a surge in the Omicron coronavirus variant forced the company to cut down on operating hours at its outlets.
But Chief Executive Fran Horowitz said sales had started to improve as products arrived and COVID-19 cases fell, giving the firm momentum into the current quarter.
Abercrombie projected net sales for fiscal 2022 to rise 2% to 4%, above estimates of a 2.7% rise at midpoint, but that did little to ease investors’ concerns.
The Ohio-based company’s net sales rose to $1.16 billion in the fourth quarter from $1.12 billion a year earlier, but missed analysts’ estimates of $1.18 billion, according to IBES data from Refinitiv.
Though Abercrombie offered fewer and smaller discounts to protect its margins from soaring expenses, its profit per share of $1.14 fell short of estimates of $1.27.
Teen apparel peer Urban Outfitters Inc also saw a fall in store traffic before Christmas, while American Eagle Outfitters Inc has signaled a hit to holiday sales due to the same factors of supply chain snarls and Omicron.
(Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)
Source: One America News Network
